Striking gold mine workers in a battle they cannot win

SA’s gold mining industry is locked in the final stages of a decades-long death spiral, with many gold mines unprofitable at current prices.

Back in 1987, President Cyril Ramaphosa — then a 34-yearold labour union leader — led 300,000 black miners in a strike that symbolised resistance to the apartheid regime. Now, striking gold workers face a less politically charged battle, but one they can’t win.

The nation’s 130-year-old gold industry — which has produced half the bullion ever mined on earth — is facing increasingly difficult times and a bleak future. Dwindling output has cut gold’s contribution to little more than 1% of the economy, down from 3.8% in 1993.

While the industry’s demise won’t reverberate in the way it once would have, mineral resources minister Gwede Mantashe has criticised Gold Fields’s plan to cut jobs as the ANC seeks to shore up its base before elections in 2019.

Mines run by Gold Fields and Sibanye Gold have been halted by strikes over job cuts and wages, respectively. Both producers cut their output projections for 2018 .

SA’s gold industry now employs just over 100,000 people, less than a fifth of the number that used to power the apartheid economy.

The economic and social impact of a further contraction in the industry will be magnified as every gold miner supports between five and 10 dependants, while creating two jobs elsewhere, according to the Minerals Council SA.

Higher wages and power prices, combined with the geological challenges of the world’s deepest mines, will mean more job losses and less production in the country over the next five years, Gold Fields CEO Nick Holland said in an interview.

“When you work out the math, when you keep doing that year after year, you are going to go out of business very quickly,” Holland said. “The industry will just continue to see a slow death,” he added.

Sibanye, the country’s biggest producer, faces wage strikes at three of its mines. CEO Neal Froneman acknowledges that pressure is building on it to resolve its safety problems after more than 20 fatalities this year. If that can be done, he’s optimistic that SA’s gold mines can survive a little longer.

“It’s an industry in decline, yes, and if sunset means the sun setting in 10 years or 15 years, that’s still 10 or 15 years away,” he said in an interview in November. “There is still money to be made.”